Reports at the weekend alleged Ms Alexander raised £12,000 for one of her election campaigns from events run by a front organisation in 2002.

Some people who attended the events said they had no idea the money was being channelled to Ms Alexander.

But she shrugged off the allegations on a visit to a city farm in Edinburgh.

An organisation called the Scottish Industry Forum is alleged to have given money from two dinners held in 2002 to Ms Alexander's constituency office for her 2003 election campaign.

The Scottish Industry Forum have made clear that they were the main Labour business organisation for more than a decade

Wendy Alexander MSPScottish Labour leader

Some of those who took tables said they attended thinking it was an event to establish bridges between government and business, and that were unaware that the cash raised would fund the local Labour Party.

They have called on the matter to be investigated by the police or Electoral Commission.

In a statement, Labour said Scottish Industry Forum was a business group which was patently Labour supporting, and the sponsorship given to Ms Alexander's constituency office was a reflection of the support she had offered to the work of the forum.

Speaking during a visit to the city farm in Edinburgh, which Labour claim is under threat due to SNP spending cuts, Ms Alexander said: "I'm getting used to the mud slinging from events from six years ago.

"The Scottish Industry Forum made clear that they were the main Labour business organisation for more than a decade.

"They were part of the prawn cocktail offensive, and as I say I'm here to talk about the cuts that have been made here and now in Edinburgh badly affecting families."

Rival parties

Last week Ms Alexander said that she had been "vindicated" after the Electoral Commission decided not to report her to prosecutors over a £950 donation to her party leadership campaign from a Jersey-based businessman.

The Electoral Commission said it was neither appropriate nor in the public interest to report her under legislation which makes it an offence to accept donations from someone not on the UK electoral register.

Labour's Secretary of State for Scotland Des Browne has publicly backed the Electoral Commission's findings and called on rival parties to accept it.

Speaking on a ministerial visit to Rosyth Dockyard on Monday, he said: "As far as I'm concerned I never had any doubts that Wendy Alexander, who I know and worked with for a number of years, in fact decades, is an honest woman."